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Advice network handed pension transfer ban

Regulator also says it must not take on any new appointed representatives

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The Financial Conduct Authority (FCA) has told Shrewsbury-based advice network Pi Financial that it must stop carrying out pension transfers and pension opt-outs.

The network has over 120 advisers and 37 appointed representative firms.

On 17 February 2023, the UK regulator placed a number of restrictions on Pi Financial including that the firm must immediately cease carrying on pension transfers and pension opt outs for which it has a Part 4A permission for new customers.

Also, the firm must not, without the prior written consent of the FCA, provide any advice on pension transfers and pension opt outs for existing customers and customers who have already submitted a request for the firm to provide advice on pension transfers and pension opt outs, also known as “pipeline customers”.

The FCA also said that Pi Financial “must not take on any new appointed representatives”.

Asset requirement and PI review

As well as pension transfers and appointed representatives, the FCA issued an array of asset restrictions.

This includes:

  • The firm must not, without prior written consent of the FCA, take any action which has, or may have, the effect of disposing of, withdrawing, transferring, dealing with or diminishing the value of any assets it holds or receives, for itself or on behalf of another, until the firm has “satisfied the authority that it has made reasonable provision for potential liabilities”; and
  • The firm may continue dealing with or disposing of any of its own assets in the ordinary and proper course of business provided that the sum or value of such dealings or disposals, whether as a single transaction or a combination of related transactions, does not exceed £5,000 ($5,637, €6,012).

The FCA also told Pi Financial that it must review its professional indemnity (PI) insurance coverage “in light of the current and potential claims against it and use best endeavours to ensure that the level of coverage is sufficient to pay any potential redress liabilities arising out of the potential claims based on the firm’s best estimate”.

“The firm must ensure it complies with its professional indemnity insurer’s notification requirements in respect of any potential claims”, the UK regulator added. “If the professional indemnity insurance coverage is withdrawn or reduced, or the firm has reason to believe it may be withdrawn or reduced, it must notify the FCA in writing immediately.”

The FCA did not state the full details of why it has handed restrictions to Pi Financial.

International Adviser has contacted the advice network for a comment, but it did not reply in time for publication.

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